Friday, October 30, 2009

We've posted so much on FSLR that I gave up linking. If you're interested, use the 'Search Blog' box, keyword FSLR.From Tech Trader Daily:First Solar Crushed; Merrill, Caris, Gabelli Downgrade

First Solar(FSLR) shares are getting absolutely crushed today, after a disappointing Q3 earnings report and weaker Q4 guidance. The combination triggered some extremely bearish Street commentary, and spurred at least three analysts to issue downgrades.

Bank of America/Merrill Lynch analyst Steven Mliunovich cut his rating on the stock to Neutral from Buy, with a new price target of $135, down from $180. He chopped his 2010 EPS estimate to $7.22, from $6.25. “It’s difficult to see upside catalysts given concerns regarding pricing and the German feed-in tariff along with the company’s limited ability to increase production if demand surprises on teh upside.,” he writes. “We see four quarters of year-over-year earnings declines, not typically good for stock performance.”>>>MORE

As I said in the post on capacity/supply, this is tradable on the long side now.

Thursday, October 29, 2009

We posed that question to two prominent Wall Street economists with two very different views of 2010. Bruce Kasman, chief economist at J.P. Morgan, sees the U.S. growing at about a 3.5% pace for most of next year. That appears optimistic compared to Jan Hatzius, chief economist at Goldman Sachs, who sees gross domestic product growth of 2% or so at the start of the year tapering off to just 1.5% by year-end.

The following is an edited transcript of their remarks during a recent conference call with The Wall Street Journal.

Looking ahead to 2010, what kind of recovery do you see?

Kasman: We’re going to get more growth than people expect, but a lot less than we need. The power of a business cycle, once policymakers are committed to supporting growth and once activity levels get down so low that even modest changes in behavior start to give us a lift, should not be underestimated. Deep recessions have been followed by strong growth [because] those dynamics start to gather some steam. At the same time, even if we’re talking 3.5% to 4% growth, that’s not going to put us in a position 18 or 36 months from now to feel as if we have a labor market that will look anything like it used to over the last 20 years – I think that would take sustained growth in the 5-6% range for three or four years, which we did deliver coming out of the mid-70s and early-80s recessions, so it has been done.

Hatzius: I think we’re going to lose a lot of short-term stimuli and the headwinds to a stronger pickup in underlying demand are, I think, pretty formidable and much more formidable than what you saw, for example, in the mid-1970s or early ‘80s when you had a lot more pent-up demand. I think it’s just a very different business cycle and extrapolating from the history of the ‘70s and early ‘80s I don’t find that promising on the forecasting front.

Kasman: What is similar, I think, in this cycle that has been consistent across cycles is that we get to a point in which the adjustments in housing, in manufacturing, in the retail sector become very sharp and with a little bit of help from policy and an improvement in financial market conditions that provides an opportunity for a lift – and I think now that’s what we’re starting to see take place....MORE

Long time readers know we are fans of really, really fast computers. Here's the question, via PhysOrg:

In the 1995 Halloween episode of The Simpsons, Homer Simpson finds a portal to the mysterious Third Dimension behind a bookcase, and desperate to escape his in-laws, he plunges through. He finds himself wandering across a dark surface etched with green gridlines and strewn with geometric shapes, above which hover strange equations. One of these is the deceptively simple assertion that P = NP.

In fact, in a 2002 poll, 61 mathematicians and computer scientists said that they thought P probably didn’t equal NP, to only nine who thought it did — and of those nine, several told the pollster that they took the position just to be contrary. But so far, no one’s been able to decisively answer the question one way or the other. Frequently called the most important outstanding question in theoretical computer science, the equivalency of P and NP is one of the seven problems that the Clay Mathematics Institute will give you a million dollars for proving — or disproving. Roughly speaking, P is a set of relatively easy problems, and NP is a set of what seem to be very, very hard problems, so P = NP would imply that the apparently hard problems actually have relatively easy solutions. But the details are more complicated....MORE

There have been a few broker notes out suggesting that the GSE preferred stock is going to zero. The preferred stock itself has been dreadful lately – retreating almost to our original purchase price.

I think the broker notes are wrong – but lets do this formally because if you look at the assumptions in my model and the assumptions in the broker notes you can make up your own mind. [I will lay out their assumptions and my assumptions clearly – you decide.]

The first “GSEs are zero” broker note was produced by Keefe Bruyette & Woods (one of the few brokers left covering the stocks). I have reproduced the note here (and claim fair comment use for doing so).

The core assumption is that the GSEs are closed – and that they are put into very rapid run off – and that they do not earn much money during this run off period. Here is the revenue model for Freddie Mac....

He ends with:

...Winding down the GSEs right now runs the risk of killing the nascent recovery in the housing market.

The sensible course of action is to just wait. This is policy that can be delayed without any real additional risk to the government. (The government is already on the hook for the losses.)

If my math is right – and I think it is – then the GSEs will appear solvent in time for the 2012 election. The government can demand (and receive) almost 100 billion in capital to be repaid from them (which will make the budget look good and undermine the only viable Republican argument that the Democrats are irresponsible). It will make the government look like good conservators of key institutions. It will make Obama look like safe hands for running America.

The anti-GSE lobby knows this is a possibility and they are determined to capture as much GSE business as possible right now – so they are vociferous in their claims. Sensible people should ignore them.

In between those two exerpts are more facts and figures than any junky could hope for. This might be the definitive analysis of the former* GSE's.

U.S. Renewable Energy Group, China’s Shenyang Power Group, and Cielo Wind Power to Develop a 600MW Wind Farm in Texas

The U.S. Renewable Energy Group (US-REG) and Cielo Wind Power LP today announced they have entered into a joint venture framework agreement (the “JV Agreement”) with China’s Shenyang Power Group (“SPG”) which sets forth plans to develop a 600MW wind farm across approximately 36,000 acres in Texas. The agreement marks the first time China and U.S. entities agree to jointly develop a utility-scale wind power project. The project is estimated to have a total cost of approximately $1.5 billion and A-Power Energy Generation Systems, Ltd. (Nasdaq: APWR, or “A-Power”), a shareholder of SPG in China, is designated as the supplier of 240 units of the 2.5MW wind turbines manufactured at A-Power’s facilities in Shenyang, China. In total, the wind farm is expected to produce enough electricity for 180,000 homes and create hundreds of American jobs. It is also expected to be one of the largest wind farms in the U.S.

According to the JV Agreement, commercial banks in China are expected to finance the $1.5 billion required for the project through SPG. Subject to securing such financing, among other conditions in the JV Agreement, A-Power is expected to start shipping the wind turbines in March 2010....MORE

CNN should consider banning its anchors from appearing on "Celebrity Jeopardy" after the humiliating defeats of Wolf Blitzer and Soledad O'Brien. Wolf was blitzed last month, coming in last with minus-$4,600, behind comic Andy Richter, a past winner who racked up $68,000 for charity. "Desperate Housewives" star Dana Delany came in second. This month, it was O'Brien's turn against NBA legend Kareem Abdul Jabbar and Michael McKean, of "Spinal Tap," "Laverne & Shirley" and "Saturday Night Live." McKean, a previous winner, ended with $24,800, followed by Abdul Jabbar with $8,800 and O'Brien with $6,200. A CNN insider defended the journalists: "They are reporters, not trivia experts. And the buzzer is complicated....MORE

I'm starting to think that this is one of those stocks that always seem overpriced.I passed on Berkshire Hathaway the first time it was shown to me, at $800/share.As one of my mentors used to say, "Stocks are smarter than analysts (fund managers,etc.).From Reuters:

For the full year, the company now sees earnings of 59 cents to 64 cents a share, excluding items, up from its prior forecast of 41 cents to 47 cents a share.

American Superconductor, which also offers smart grid infrastructure technologies, forecast full-year revenue of $300 million to $310 million, up from its previous view of $260 million to $270 million.

It is positioned for strong growth in the second half of the fiscal year, the company said in a statement.

"We expect to increase revenues quarter over quarter through the remainder of fiscal 2009," Chief Financial Officer David Henry said in a statement.

The China wind industry is the key driver of American Superconductor's growth.

The company makes superconductor power cable systems that reduce transmission losses by a great extent and can be used in smart grids -- which aim to make existing power grids more efficient....

Sinovel Wind, which started manufacturing wind turbines less than four years ago, is China's largest wind turbine maker and one of the top 10 in the world, and accounts for nearly 70 percent of the company's revenue....MORE

For the quarter, AMSC posted revenue of $74.7 million, up from $40.1 million a year ago, and ahead of the Street at $69 million. Gross margin expanded to 38.9% from 26.5% a year ago; non-GAAP profits of 19 cents a share were well ahead of the Street consensus at 16 cents....MORE

From the Boston Business Journal

AMSC ups guidance after solid quarter

American Superconductor Corp. posted a 85 percent year-over-year rise in revenue and swung to a profit in its fiscal second quarter on fresh contracts with Asian wind turbine makers. The company also raised expectations for its fiscal year revenue and profit.

The Devens, Mass., producer of alternative energy electrical components and wind turbine designs (Nasdaq: AMSC) reported revenue of $74.7 million in the quarter ended Sept. 30, compared with $40.4 million in the same quarter last year. Power system revenue more than doubled to $71.8 million from $35.6 million a year ago, while revenue from sales of superconductor wires fell to $2.9 million from $4.8 million last year.

AMSC swung to a net profit of $4.3 million, compared with a net loss of $4.1 million a year ago.

In a statement, AMSC chief financial officer David Henry said next quarter’s profit will be about half of the most recent quarter’s profit due to shipments of lower-margin products and a planned bump in operating expenses “to support future growth.”>>>MORE

American Electric Power Co. on Thursday said Thursday third-quarter profit rose on higher rates charged its utility customers, even as the power generator and transmission giant absorbed the impact of a slower economy and seasonably cool summer temperatures. Meanwhile, PPL Corp. (PPL29.41, -0.07, -0.24%) said quarterly earnings fell 90% on a number of one-time charges, while profit at Xcel Energy (XEL19.11, -0.12, -0.62%) remained about flat. Allegheny Energy's (AYE24.86, -0.16, -0.64%) earnings fell 13%.

AEP (AEP30.35, +0.69, +2.33%) said earnings for the three months ended Sept. 30 increased to $443 million, or 93 cents a share, up from $374 million, or 93 cents, earned in the year-ago third quarter. Earnings per share were flat as shares outstanding rose 19% to 477 million.

The Columbus, Ohio-based power provider said revenue fell 16% to $3.5 billion from $4.2 billion.

Analysts, on average, had expected earnings of 85 cents a share on revenue of $4.09 billion, according to a survey by FactSet Research.

Michael Morris, chairman, president and chief executive, said management was pleased with AEP's results in light of a number of negative factors, including the summer weather as well as the weak state of the economy....MORE

This is tradable. The stock is down $26.48 (17.47%) at $125.10.From PV-Tech:

First Solar maxed out

Demand for First Solar’s CdTe thin-film modules nearly exceeded supply in the third quarter as major projects were completed and its German rebate program came into full affect. The company expects demand to exceed supply for installations in the fourth quarter and expects to enter 2010 with low inventories. First Solar produced 292MW during the third quarter, 1% over the prior quarter as all lines including those in Malaysia were fully ramped, shipping its entire production in the quarter. However, the company noted that during the quarter, it started to decommission line one in Perrysburg, Ohio to enable higher production capacity as a four-line configuration. The Ohio line expansion remains on plan to ramp in the first quarter of 2010, company executives said during a conference call with financial analysts.

Production improvements continued in the quarter as First Solar’s current 22 lines annual line run rate was 53MW, up 2.5% over the second quarter due to improved throughput and conversion efficiency improvements. The thin-film leader noted that average conversion efficiencies had reached 11% in the quarter, up 0.1% compared with the previous quarter....MORE

The big dog is down $22.30 with half an hour to go before the market opens.U.S. solars SunPower and Energy Conversion Devices are down 2/3% and 7/10% respectively.Chinese solars Suntech, Trina and Yingli are flat to down with bull market standout Trina down the most, 1.1%.The solar ETF TAN is showing up 10%, which, if it's a good print should offer an arb. The other solar ETF, KWT, hasn't traded.

Unlike his fellow gloomster David Rosenberg, Société Générale's Albert Edwards amuses* as he forecasts gloom, doom and despair. They both bow to the master, the Telegraph's international business editor, Ambrose Evans-Pritchard whose writing I once described as a "continuum that ranges from morose to suicidal. Here he is at his despondent best..."

The latest from Mr. Edwards at Blomberg:

The two-week retreat in global equities may turn into a “rout” after a measure of so-called leading indicators fell, signaling the economic recovery may be peaking, according to Societe Generale SA’s Albert Edwards.

An Economic Cycle Research Institute gauge of the U.S. economic outlook slipped to 27.2 in the week ended Oct. 16 from 27.8 the previous week, the first drop since March, according to Bloomberg data. The decline is “tentative evidence” that the economy’s rebound is near a peak, Edwards, a global strategist at Societe Generale in London, wrote in a research report today.

“They say the trend is your friend until it hits a bend,” Edwards wrote. “Beware, we may have just hit one.”

The MSCI AC World Index of stocks in developed and emerging nations has dropped for eight straight days, the longest losing streak since July 2008. The index had rallied as much as 73 percent from this year’s low on March 9 as investors speculated more than $2 trillion in global government stimulus would lift the world economy from its first recession since World War II.

Edwards said equities may mirror changes in the economic cycle, citing patterns seen during the “structural” bear market in Japanese stocks in the 1990s. Declines in Japan’s leading indicators during that period provided sell signals for equities, he wrote.

“I remain convinced we are still in a structural bear market and that this economic recovery rests on such shallow foundations that it will be washed away by the first moderate wave,” Edwards wrote....MORE

Wednesday, October 28, 2009

There often is some degree of subtlety in illicit efforts to manipulate stock prices.

But in a suit the Securities and Exchange Commission filed Thursday, the agency alleges that an East Coast stockbroker issued blatantly phony press releases about companies in attempts to push up their shares.

The case, as documented by the SEC, is downright comical, except for the fact that some hapless investors fell for the scam....

...--- On Oct. 1, just before the market closed for the day, he bought 5,000 shares of Irvine-based Local.com, an Internet search engine, for $5.33 each.

In the following hour, Ballas posted press releases on two PR wire services announcing that Local.com had agreed to a buyout by Microsoft.

--- Ballas then went on the Yahoo message board for Local.com, directing people to the phony news releases and urging them to buy the company’s shares in after-hours trading. "Woo hooo .... daddy needs a new pair of shoes," he wrote in one post.

Some investors apparently fell for it -- and drove the stock as high as $9.65, the SEC said -- even though the release included sentences like this gem: "For those of you who own it, enjoy the success, for those of you who do not, mergers right now seem to be hot, and keeps [sic] your scanners peeled for opportunities."

--- Within a few hours, Local.com issued a statement denying that it was in a deal with Microsoft.

Undeterred, Ballas tried to issue yet another phony release about Local.com the very next day, this time saying that the company would be bought by Google. The first service he tried to use, WiredPRNews.com, expressed concern that the announcement might be a hoax. So Ballas went to another service, EIN Presswire, and got his fake announcement published for $49.95, the SEC said....MORE

And here's a story from twenty years ago this summer(I hope this is fair use, I've got a reason for putting out the abstract found on Proquest, this story was class act journalism). I made a mistake in the post below, it appears the the securities analyst making the buyout offer was hospitalized subsequent (not prior) to the call to DJ:

One week ago, a troubled Cincinnati man made a bogus bid for control of Dayton Hudson Corp. Paul David Herrlinger caused the retailer's stock to shoot up $9 a share hours before a family lawyer announced that Mr. Herrlinger was more crazy than rich. Investors who bought Dayton Hudson stock on the preliminary news wire reports found that by the end of the day they had lost an estimated $15 million.

The dip in revenue from $525 million in Q2 to $480 million in Q3, below analysts’ estimates, was because of a single order that were “not able to be recognized” — in other words, implying cash collected but not able to be recorded on the income statement within the quarter. The company did not make clear when that revenue will be recognized.

In addition to the revenue miss, analysts will be pouring over the gross margin implications....MORE

At Environmental Capital, Journal energy reporterRussell Gold is working the late shift:

Pay Me Later: First Solar Battles Rising Receivables

First Solar, the Arizona thin-film solar powerhouse, has many friends in the investosphere and was recently given a boost when it was added to the S&P 500 Index.

What we want to know is: does it have enough customers who pay on time?

The company reported third quarter results on Wednesday and turned in a $153.3 million profit. We have to admit this is one reason we pay attention to First Solar – it actually makes a profit.

But the company has seen its accounts receivable balloon in recent quarters. They jumped 90.1% — nearly doubling – from $184.8 million in the first quarter to $351.3 million in the second quarter. This can be partly explained by the extension of favorable payment terms by First Solar to some customers.

And so were somewhat cheered when it reported that its accounts received was pretty much flat this quarter at $349 million.>>>MORE

The environmental activist and VC talks up his love of green energy, opposition to a Feinstein bill, and concern about Chinese solar companies ‘flooding the market.’Robert F. Kennedy Jr. delivered a rousing speech that called for a national build-out of renewable energy production and transmission, a talk that got him a standing ovation at Solar Power International in Anaheim Wednesday.

Kennedy, an attorney for the Hudson Riverkeeper and a partner at VantagePoint Venture Partners, positioned himself as an advocate for environmental protection and clean energy businesses....

...Kennedy is a big supporter of solar farms and highlighted Oakland-based BrightSource Energy – a VantagePoint portfolio company – in his speech. BrightSource is developing 2.6 gigawatts of solar thermal power plants in California and southwestern states.

He said projects like BrightSource's are important for boosting renewable energy generation quickly in the country. He also voiced his objection to a bill being worked on by Sen. Dianne Feinstein to set a large track of land in California's Mojave Desert as a national monument, a designation that would prevent power plant development....

...Kennedy not only railed against the coal industry, he also characterized China as a big competitor for the United States in the energy equipment market, a comparison that might be at odds at a solar conference with a strong contingency of Chinese manufacturers (Trina Solar's name is on the freebie bags given to conference attendees).

"We are in an arms race with the Chinese. It's not over tanks and planes, but who is going to build more solar panels, and build them more efficiently," said Kennedy, who added that Chinese manufacturers are going to "flood the market" with their goods.

Maria Shriver, the First Lady of California is Mr. Kennedy's cousin. From the AP via the Seattle Times:

Solar deal to enrich firm with Schwarzenegger tie?

A relative of Gov. Arnold Schwarzenegger and one of his former cabinet secretaries are part of a private investment group that could score a lucrative payoff if regulators approve a sprawling solar-energy complex near the Mojave Desert Preserve....MORE

Here's a copy of a letter from the staff counsel to the siting committee of the California Energy Commission:

Commissioners:

Brightsource’s June 8, 2009, letter exhorts the Committee to order the Energy Commission staff (Staff) to rush the publication of its environmental assessment before that assessment is complete, based on the general need of the state to develop renewable energy and the specific need of Brightsource to qualify for economic stimulus money. With overheated rhetorical flourish it claims that “the proceeding is at a dead stand still” and implies that Staff is “holding the FSA/DEIS hostage.” These claims are wrong. As the Siting Committee knows from the discussions at the May 18, 2009, scheduling conference, the scheduling issues for the Ivanpah project are much more complex than the Brightsource missive would indicate....MORE

Brightsource is expected to be the recipient of Federal loan guarantees. To understand the magnitude, the first such guarantee was to Goldman Sachs/Wal*Mart heirs- backed Solyndra, for $535 million.

The broad Standard & Poor’s 500 stock index now rests precariously on its 50-day moving average of about 1050. If stocks do fall through that trend line, it could represent a change in direction from an almost unbroken uptrend seen in the 50-day S&P average since stocks struck their early March lows....MORE

From FT Alphaville:

Support the S&P 500

We often get accused of being grave diggers here on FT A-ville. So, at the close of one of the most difficult days for Wall Street in some time (coinciding with the 80th anniversary of the Great Crash of 1929) , let’s try and give US stocks a hand.

Here’s a BarCap chart of the S&P 500 which overlays our experience this year with the performance of stocks back in 1974. Striking, isn’t it? Prices certainly look to have run too far, too fast. A substantial retracement is inevitable before equities can make any further headway:

Gross margin slumped to 50.9% from 56.1%. The company has said it won't be able to avoid pricing pressures afflicting its rivals--and in July said it expected margins to fall due to more system installation in North America and a rebate program....MORE

First Solar, Inc. (Nasdaq: FSLR ) today announced its financial results for the third quarter ended September 26, 2009. Quarterly revenues were $480.9 million and excluded the Sarnia project, which was over 65% completed at quarter end. Revenues were $525.9 million in the second quarter of fiscal 2009 and $348.7 million in the third quarter of fiscal 2008.

Net income for the third quarter of fiscal 2009 was $153.3 million or $1.79 per share on a fully diluted basis, down from $180.6 million or $2.11 per share on a fully diluted basis for the second quarter of fiscal 2009 and up from $99.3 million or $1.20 per share on a fully diluted basis for the third quarter of fiscal 2008.

The Company has also posted its Earnings Call Presentation, which includes updated guidance for fiscal 2009 on the Company’s web site. The Company expects full year fiscal 2009 revenue at the updated guidance range of $1.975 to $2.025 billion, which is at the high end of the previously provided guidance range.

First Solar will discuss these results and outlook for fiscal 2009 in a conference call scheduled for today at 1:30 p.m. MST (4:30 p.m. EDT). Investors may access a live audio webcast of this conference call or the Earnings Call Presentation in the Investors section of the Company’s web site at www.firstsolar.com. An audio replay of the conference call will also be available approximately two hours after the conclusion of the call. The audio replay will remain available until Monday, November 2, 2009 at 11:59 p.m. EDT and can be accessed by dialing 888-203-1112 if you are calling from within the United States or 719-457-0820 if you are calling from outside the United States and entering access code 1744958. A replay of the webcast will be available on the Investor section on the Company’s Web site approximately two hours after the conclusion of the call and will remain available for 90 calendar days. If you are a subscriber of FactSet and Thomson One, you can obtain a written transcript within two hours....MORE

This isn't tradable until either the conference call or tomorrow.Mr. Ahearn and the rest of the insiders are to be commended for their insider sales, some at prices exceeding $300/share.

Bolivian mining officials have opened talks with French conglomerate the Bollore Group, which is vying for a contract to mine lithium at the Uyuni salt flat, President Evo Morales said on Tuesday.......The Bollore Group (BOLL.PA) has developed a lithium battery that can power an electric car at a speed of up to 77 miles per hour (125 km/hr) with a range of 155 miles (250 km)....

Yesterday Cleantech reported:

Bollore Group opens lithium-metal-polymer battery factory near Montreal to supply electric vehicles made by Italy's Pininfarina and France's Gruau Group.

France's Bolloré Group (EPA:BOL) unveiled today its $120 million upgrade to a lithium-metal-polymer battery factory in Québec, Canada, that the company took over in 2007.

French billionaire and Bolloré Group CEO Vincent Bolloré told the Cleantech Group that the expansion is part of his company's $1.5 billion initiative to have two facilities with a total production capacity of 30,000 solid-state batteries per year to supply makers of electric vehicles with an alternative to lithium-ion batteries....MORE

Brazil's Environment Minister Carlos Minc said on Tuesday that the government is studying deeper emissions cuts than previously announced and that it favors a U.N.-backed forest preservation scheme....

..."Our proposal has evolved, we're looking at a 40 percent reduction over 2020 levels," Minc told a news conference in the capital Brasilia....MORE

The Chinese government house organ helpfully provides some detail not in the Reuters story. From China Daily:

The inclusion of UN Reducing Emissions from Deforestation and Degradation (REDD) programme in anew agreement to extend or replace the Kyoto Protocol could generate between 8 billion and 16 billion U.S. dollars annually in carbon credits for Brazil, the Brazilian Association of Carbon Market (Abemc) said on Monday.

Currently, the UN-REDD is not covered by the Kyoto Protocol, which recognizes only the carbon credits for the recovery of lost areas or reforestation in areas where there were no forests....MORE

Today marks 80 years since the best known part of the 1929 stock market collapse, a two-day rout on Oct. 28 and Oct. 29 of that year. The equities crash brought a painful close to the period of unbridled financial optimism that was the 1920s.

To mark the occasion, MarketBeat has been asking financial historians for their thoughts — mini-essays if you will — on how the Great Crash informs the way we think about the current market recovery. Today’s offering comes from Richard Sylla, Henry Kaufman Professor of the History of Financial Institutions and Markets at New York University:

Because their teachers and their history books said so, most people know that the Great Crash of 1929 caused the Great Depression of the early 1930s. I am not one of these people.

What I know is that the Dow Jones Industrial Average closed at 306 the day before Black Thursday, October 24, 1929, and at 199 on November 13, three weeks later. That drop of 35 percent was the Great Crash. I also know that on April 17, 1930, the day before Good Friday, the Dow closed at 294, or 96 percent of its level before Black Thursday. In other words, almost all of the decline of the crash proper had been undone by a recovery of 48 percent in the Dow between Halloween ‘29 and Easter ‘30. Most people don’t know that, or if they ever did they forgot it.

On Good Friday ‘30, the New York Times referred not to the Great Crash, but to “the break in the market last Fall.” The Times that day also noted that the day before, April 17, “average prices worked higher and a few outstanding issues shot up smartly to new high prices for the year to date,” and that “British interests were investing heavily in these issues.”...MORE

Al Gore was beating the climate change drum again on Tuesday, this time in Dubai, as the former U.S. vice president warned global warming will create “hundreds of millions of climate refugees”.

“Each one metre of sea level rise is associated with 100 million climate refugees in the world,” the Nobel laureate told a business forum in Dubai, which could see its famous man-made islands disappear under the waves if his predictions prove true.

“The North Pole ice cap is 40 percent gone already and could be completely and totally gone in the winter months in the next 5 to 10 years,” he warned....MORE

Although Maktoob.com is a pretty big internet service provider, I don't know their business reporting and couldn't find another source for the quote*.

...Modelling of Arctic sea ice by the Met Office Hadley Centre climate model shows that ice invariably recovers from extreme events, and that the long-term trend of reduction is robust — with the first ice-free summer expected to occur between 2060 and 2080. It is unlikely that the Arctic will experience ice-free summers by 2020....

Don't go scaring me like that, Al.The UAE's Khaleej Times had this quote:

“I personally believe that solving the climate crisis is the biggest single business opportunity in the history of the world,” Al Gore said.

Abu Dhabi's The National also covered the speech, without mention of the ice-free in winter quote.The official website made mention of both Mr. Gore's Webby and Grammy awards.

UPDATEOriginal post:We'll have more on this later today.From Bespoke Investment Group:

While the Dow is down just 50 points at the moment, both the S&P 500 and the Nasdaq are quietly down more than one percent. As shown in the first chart below, the Nasdaq just broke below its 50-day moving average for the first time since July, which means its multi-month uptrend is in big jeopardy. The S&P 500 is currently testing support at its 50-DMA, and the bulls are desperately hoping that it holds. The same thing happened for the S&P at the end of September, and the bulls prevailed. We'll see how it plays out this time around, but things definitely look a lot different now than they did just a couple weeks ago....MORE, including charts

It's almost mind-boggling to look at CAT as a green play.However the company is a member of the lobbying group USCAP, although they recently called for carbon taxes rather than USCAP's cap-and-trade position.From the Chicago Tribune:

Douglas Oberhelman, named last week the incoming CEO of Caterpillar Inc., acknowledges it's hard for people to identify a company "famous for bulldozers" with an environmental agenda.

But in an interview and in a speech last week in Chicago, he said that's where the company, like his farm, is heading.

At his Peoria County, Ill., farm, Oberhelman says, he walks the talk.

He has added terraces, wetlands and wildlife around what once was a coal mine, and he trades corn and beans he raises on 250 acres with a neighbor who, in turn, supplies him manure from 1,500 dairy cows.

A Caterpillar engine helps to convert fumes from the manure into electricity, which, in turn, powers the farm he bought in 1997.

The company also is "doing things that might surprise you," 56-year-old Oberhelman said last Thursday at an event sponsored by the conservation group Ducks Unlimited.

Previously as president of the company's engine and services business, Oberhelman expanded Caterpillar's "remanufacturing" efforts in China, Singapore and India so that only 10 percent of old engine parts end up in a landfill. And the same engine Oberhelman uses to produce electricity on his farm is used by Waste Management, the trash company.

"They've joked with me about becoming a public utility," he said.

And rather than install 4,300-horsepower engines in diesel locomotives, Caterpillar now installs two: one at 3,500 horsepower and the other at 800 horsepower.

"I went on a 30-mile test run, and the more powerful engine only had to be used half the time," he said. "You don't need it on a downhill run. It's a very green solution for our customers.">>>MORE

UPDATES: Earnings and reaction, follow the links backward.Original post:The company will report after the close today. The stock is currently up $2.03 at $152.25.Two from SmallCapPulse:

Analyst Comments – Cowen’s Rob Stone reiterated his OUTPERFORM rating on First Solar (Nasdaq:FSLR) this morning, noting that he expects Q3 results above the Street. He sees 30%+ upside in FSLR relative to the market in 12 months, but sees more chance than not of a post quarter pullback....MORE

And:

Analyst Comments – Cowen’s Rob Stone commented on the solar sector this morning noting that “We are puzzled by recent stock action in the solar group.” He said “H2 demand should support much better momentum and less seasonality entering 2010 than seen in H1:09, and upcoming German and Italian policy changes appear unlikely to be disruptive.” He reiterated his OUTPERFORM rating on First Solar (Nasdaq:FSLR), SunPower (Nasdaq:SPWRA) and Trina Solar (NYSE:TSL). ...MORE

With ratings falling off a cliff (down 50+% over some measurement periods*) CNBC appears to have decided to just pitch G.E.'s party line, possibly an attempt by the cable top brass to keep their jobs.From Reuters:

The Good Entrepreneur, a new `green` reality series, will premiere on 5 Novemberat 23.00 CET on CNBC, the leading pan-EMEA business and financial news channel.Hosted by CNBC`s Steve Sedgwick, the four-part series will see threeentrepreneurs pitch eco-friendly business concepts to a panel of leading CEOsand academics, each competing for a prize package valued at €250,000. The serieswill air across Europe, the Middle East and Africa and South East Asia.

The series will follow each entrepreneur`s journey towards making their businessa reality. They will meet mentors, including business executives and academics,who will offer advice and identify the strengths and weaknesses of theirbusiness proposals.

In the series premiere, viewers will meet the show`s first contender, UK basedarchitect Craig White. Craig`s business idea, to build modular buildings out ofstraw bales, could see homes and commercial buildings save up to 85% of heatingcosts. Craig travels to London, Berlin and Lund in Sweden on his quest to gainbusiness insight....MORE

The bloodbath at GE's propaganda station has reached critical levels: according to Nielsen, CNBC has lost 28% of viewers year over year, and 24% in the 25-54 age group category. This is obviously a stunning failure in an environment where the top stories on any other medium are finance and economy related. Maybe if they were to actually report objective news, Jeff Immelt would not have to scratch his head in wonderment, pondering how to generate ad revenue and something even remotely resembling positive cash flow. Then again what are the poor anchors to do since the infamous Immelt memo made the rounds....MORE

In August The Atlantic was more charitable:

...But CNBC is largely a victim of its source material. Viewership spiked after Bear Sterns' meltdown because everybody was running around like chickens with their heads cut off and CNBC was the business channel. Today, as we emerge slowly from a recession, market news is still important, but we're not as worried about the banks dragging the economy down like an anchor tied to a ballerina's ankle. For heaven's sake, even AIG is turning a profit now! Winter of our discontent made glorious summer! Only, not for CNBC (or these people.)...MORE

Neither Quanta Services (PWR) or General Cable (BGC) would be named at this early stage of the approval process for these projects but are almost certain to be beneficiaries of what appears to be one of the larger packages of high-voltage power lines I've seen.Quanta specializes in the engineering while General Cable specializes in, well, cable.

...According to a source in the know at the recent 2009 KS Wind conference, "Kansas has pretty much maxxed out its available transmission for large wind farms until more lines get built. One major 345 line is underway and will be built by 2012, and hopefully another high voltage line of 765 or 345 will be approved by January and maybe built by 2014. However, in the meantime, there's lots of transmission congestion and existing wind farm production often has to be curtailed."

Just imagine what is going to happen to wind development in states where the transmission planning process is stalled or not even underway yet. I hate to think that wind could hit a major wall like that, but unless we act fast it's coming....

October 27, 2009, LITTLE ROCK, ARKANSAS – Today the Southwest Power Pool, Inc. (SPP) Board of Directors approved a package of transmission expansion “Priority Projects” for further analysis and review by regional stakeholders with oversight from the Strategic Planning Committee and in coordination with the Markets and Operations Policy Committee. In January 2010, the following Priority Projects will be presented for approval to the Board of Directors and Regional State Committee of state regulators:• 765 kV line in Kansas linking Spearville, a planned substation in Comanche County, Medicine Lodge, and Wichita, operated at 345 kV at an estimated cost of $518 million• 765 kV line linking a planned substation in Comanche County, Kansas to the planned Woodward District EHV substation near Woodward, Oklahoma operated at 345 kV at an estimated cost of $135 million• 345 kV double circuit line linking the Hitchland substation south of Guyman, Oklahoma to the planned Woodward District EHV substation near Woodward, Oklahoma at an estimated cost of $237 million• 345 kV line from Cooper in the southeast corner of Nebraska through Maryville, Missouri to Sibley (just east of Kansas City, Missouri) at an estimated cost of $278 million• 345 kV line from Valliant in southeast Oklahoma to Texarkana on the Texas-Arkansas state line at an estimated cost of $131 million• 138 kV reactor at a Tulsa, Oklahoma power station at an estimated cost of $842,000

Total engineering and construction costs are approximately $1.3 billion. Further analysis will be conducted, but the benefits of these projects are expected to exceed costs over the life of the projects, which is 30-40 years....MORE

Possibly.Combined with lobbying and firing Immelt.We had quite a few GE stories pop up in the readers today, here's the first one, from BusinessWeek:

Most of the news out of GE these days is bad. If the stories aren’t about the company’s deeply screwed up credit subsidiary, they’re about the uncertain future of the NBC Universal media and entertainment business. Now, with Comcast apparently on the verge of buying controlling interest in NBC Universal, the key to GE’s future is coming into focus: It’s the company’s core industrial businesses—which make everything from nuclear power generators and locomotives to jet engines, wind turbines, refrigerators, and health care equipment. And, of course, light bulbs.

Fortunately for GE and its investors, CEO Jeff Immelt takes innovation in the core businesses very seriously. Since he took over as CEO from Jack Welch in 2001, he has tripled the annual output of patents and doubled the company’s level of investment in overall R&D. That includes increasing the funding of basic scientific research at the labs from $315 million in 2001 to $555 million last year.

It can take years or even decades for investments in this kind of research to pay off, but Immelt and GE don’t have the luxury of time. They need to see those R&D payoffs in the next couple of years. Otherwise, GE could wind up shivering in Wall Street’s dog house for a very long time and Immelt could be out of a job.

I recently spent a day chock-full of meetings with scientists at GE’s main laboratory in Niskayuna, New York. What I saw there gave me the belief that an innovation-led surge at GE is at least in the realm of possibility. It’s no sure thing. But R&D could save GE.

GE has launched a PR spin campaign around its R&D initiatives. It invited equity analysts up to Niskayuna a couple of weeks before my visit, but got mixed reviews. While Scott Davis of Morgan Stanley recommended the stock after he came back, Sterne Agee analyst Nicholas Heymann, who didn't attend the briefing, warned that "Increasingly, the success of today's technologies can be made or broken by legislative reforms." He has a "sell" recommendation on the stock.

I don't mind being spun if there's real substance behind it--and, in this case, there is.

To me, the main thing that counts in GE's favor is it's thinking really big. A number of its research innovations could reshape entire industries. For instance, it's developing so-called continuous detonation systems for powering aircraft--which it claims could deliver 30% energy savings. A prototype is due out in 2010. "In each of the advanced technology areas, we have advances that will change the world," I was told by Michael Idelchik, vice-president for advanced technology at GE Global Research.

The science GE is working on is quite diverse, from nanotechnology and molecular imaging to organic electronics, sustainable energy, and energy conversion. In addition to Niskayuna, GE has labs in Bangalore, Shanghai, and Munich--and plans a clean energy technology center in Masdar City, Abu Dhabi; and a manufacturing technology center near Detroit. It has 2800 research employees worldwide....MORE

Michael Idelchik is vice president of advanced technologies at GE Research, one of the world's largest corporate research organizations. He oversees a wide range of projects, including ones aimed at improving conventional energy sources--with better coal and gas turbines, for example--as well as projects involving renewable energy, primarily wind turbines. At the EmTech@MIT 2009 conference, Technology Review spoke to Idelchik about some of GE's most daring long-term research efforts.

Technology Review: What is the riskiest, most early-stage research going on at GE Research?

Michael Idelchik: We're an industrial research lab, so early-stage is relative. But we have a number of projects that take years to develop. I'll give you a couple. Pulse detonation technology, or supersonic combustion. With this one, rather than burning fuel at constant pressure, you let the pressure rise, so basically you generate a shock wave; you're releasing heat in a detonation. An existing turbine burns at constant pressure. With detonation, pressure is rising, and the total energy available for the turbine increases. We see the potential of 30 percent fuel-efficiency improvement. Of course realization, including all the hardware around this process, would reduce this.

TR: In reality, the efficiency improvement in a power plant would be lower than 30 percent. How much would the improvement actually be?

MI: I think it will be anywhere from 5 percent to 10 percent. That's percentage points--say from 59 to 60 percent efficient to 65 percent efficient. We have other technology that will get us close [to that] but no other technology that can get so much at once. It's very revolutionary technology.

TR: How will this technology be used?

MI: The first application will definitely be land-based--it will be power generation at a natural-gas power plant.

TR: You will be detonating the fuel over and over again, something like an internal combustion engine?

MI: Basically you detonate anywhere from 50 to 80 hertz. Then you have unsteady flow going into the turbine. So you need to rethink how your turbine works. You don't have a steady flow anymore.

TR: What are some of the challenges, in terms of materials or that sort of thing, to making that work?

MI: You have to look at the mechanical stability, vibrational analysis. You have to protect the compressor; detonation happens in both directions, so you have to close one end. So controls and synchronization of the detonation chambers become a really big challenge as well. You have to absorb the energy from detonation and convert it to shaft horsepower. That has to be done very well, otherwise you can lose everything in the turbine. What blade design and nozzle design will allow you to extract the most horsepower?>>>MORE

Shares of Vestas (DE:VWS48.09, +2.15, +4.68%) rose over 6% to 354.25 Danish krone in Copenhagen after it reported net profit for the third quarter of 165 million euros ($245 million), an increase of 70%.

It also reported a 2.8% rise in revenue to 1.81 billion euros from 1.76 billion in the year-ago period. Analysts surveyed by Dow Jones Newswires were expecting net profit of 126 million euros, and revenue of 1.81 billion euros.

For 2010, Vestas said it expects to achieve revenue between 7 to 8 billion euros, and a margin on earnings before interest and taxation of 10% to 12%, with that range reflecting uncertainty caused by the credit crisis in the short term. Within that, it's expecting progress in the U.S. market, though its key market of Spain is proving difficult, the company said....MORE

Mr. Cramer, a word of advice: Let it go. DO NOT get into a fight with Cheat Sheet, much less DealBreaker (did you see the dirt they've got on Blankfein?) Knife/Gunfight. From DealBreaker:

The other day, the blogger over at Wall Street Cheat Sheet penned a column arguing that “according to transitive logic,” Jim Cramer would recommend selling your stock in The Street.com (TSCM), due to the fact that JC tells people to dump shares when executives leave companies suddenly or miss their filings. Both of these dealbreakers recently occurred at The Street, so the author argued that if one were a strict Cramer fundamentalist, there’d only be one thing left to do. He did not claim that JC had actually made this call himself, but rather used it as sort of WWJCD case study. You would think that Jimbo would a) realize this and b) be flattered that someone had not only bought his book but was following his teachings so closely and helping others to apply them in real time investing situations. But you’d think wrong!...MORE

According to the Financial Times, yes, and they’re the secret to Goldman’s success. Unexplored: whether or not the firm would be where it is today if the once “ostentatious and inappropriate dresser” had continued to let his freak-flag fly.

Blankfein is…not the nattiest dresser on the Street; nor is he all roll-up-your-sleeves-and-get-to-work. Instead, he has become a manifestation of sobriety, in a grey or dark two-button, single-breasted suit, medium-width lapels, no trendy touches - and a silk tie with a small geometric pattern.

These are clothes that say: I have nice stuff but it is a background to the real substance of my life. Clothes that do exactly what Blankfein told his employees to do: not spend their bonuses frivolously or too publicly. Clothes that say, “Yes, I may be about to make a shocking amount of money but not by being a financial cowboy.” (You don’t have to agree with this; I’m just translating the look.) They speak softly, and convey a big brain.

The ever chipper Ambrose Evans-Pritchard reprises a dirge we sang back in 2007*.From the Telegraph:

Biofuel refineries in the US have set fresh records for grain use every month since May. Almost a third of the US corn harvest will be diverted into ethanol for motors this year, or 12pc of the global crop.

The world's grain stocks have dropped from four to 2.6 months cover since 2000, despite two bumper harvests in North America. China's inventories are at a 30-year low. Asian rice stocks are near danger level.

Wheat has crashed 70pc from early 2008. Corn has halved. The "Ags" have mostly drifted sideways over the last six months. This divergence within the commodity family is untenable, given the bio-ethanol linkage to oil.

For investors wishing to rotate out of overstretched rallies – Wall Street's Transport index and the Russell 2000 broke down last week – this is a rare chance to buy cheap into a story that will dominate the rest of our lives.

Barack Obama has not reversed the Bush policy on biofuels, despite food riots in a string of poor countries last year and calls for a moratorium. The subsidy of 45 cents per gallon remains.

The motive is strategic. America is weaning itself off imported energy at breakneck speed. It will not again be held hostage by oil demagogues, or humiliated by states that cannot feed themselves. Those Beijing students who laughed at US Treasury Secretary Tim Geithner may not enjoy the last laugh. The US is the agricultural superpower. Foes will discover why that matters.

The world population is adding "another Britain" every year. This will continue until mid-century. By then we will have an extra 2.4bn mouths to feed....MORE

This story from The Economist got me thinking(I know, alert the media).

Rising food prices are a threat to many; they also present the world with an enormous opportunity

FOR as long as most people can remember, food has been getting cheaper and farming has been in decline. In 1974-2005 food prices on world markets fell by three-quarters in real terms. Food today is so cheap that the West is battling gluttony even as it scrapes piles of half-eaten leftovers into the bin.

That is why this year's price rise has been so extraordinary. Since the spring, wheat prices have doubled and almost every crop under the sun—maize, milk, oilseeds, you name it—is at or near a peak in nominal terms. The Economist's food-price index is higher today than at any time since it was created in 1845 (see chart). Even in real terms, prices have jumped by 75% since 2005. No doubt farmers will meet higher prices with investment and more production, but dearer food is likely to persist for years (see article). That is because “agflation” is underpinned by long-running changes in diet that accompany the growing wealth of emerging economies—the Chinese consumer who ate 20kg (44lb) of meat in 1985 will scoff over 50kg of the stuff this year. That in turn pushes up demand for grain: it takes 8kg of grain to produce one of beef....

And what was I thinking about?Farm implements!

The Economist's food-price index was created in 1845.In 1846 The British Parliament voted to repeal the Corn (grain) Laws, reducing the tariff on imported grain, effectively opening the British market to American wheat.

As reported by The Economist May 16, 1846, the British House of Commons had repealed the "Corn Laws", eliminating the tariff on imported wheat, the day before. Corn in this usage is not maize but rather is generic for grain. Prime Minister Peel won the battle but lost his premiership, the quote of the day was "Peel and repeal."

Click that Economist link. I'll wait.

May 16, 1846 "Corn Laws Repealed by the House of Commons"The bill was ushered through the Lords by the Duke of Wellington, Peel lost his job and the era of cheap food began. It lasted 160 years.

The Economist reported both ends of the story.Not many publications can say that.